By Kirstie McDermott
With prices rising globally, many workers are finding that their wages are not keeping up.
The European Commission adds to its concerns in his summer economic forecastspredicting that “a persistent feedback loop between wages and inflation is unlikely to develop” because soaring energy prices “remain the main driver of inflation.”
This is not good news if you live in an expensive economy like Denmark.
Danish consumer prices are the highest in the EU, closely followed by Ireland’s, which is 40 percent higher than the bloc’s average.
Sweden, Finland and Luxembourg are also traditionally known for their high cost of living. But Sweden, for example, compensates for this for its citizens by providing a wide variety of well-funded public services, such as health care, education and social assistance.
The downsides of good utilities can be higher taxes, higher housing costs, and a higher bill at the supermarket or for entertainment.
So, for workers who want the benefits of living in the EU, but prefer to keep a little more money in their pocket, which countries are the most affordable?
We’ve rounded up three of the best options.
Portugal: start-ups in the sun
An extremely popular tourist destination, endless beaches and a warm climate make Portugal a country we love for vacation. The southern Algarve region receives around 3,000 hours of sunshine – the equivalent of 300 days – each year, making it one of the sunniest regions in Europe.
But more and more Europeans are settling in Lisbon to work.
The Portuguese capital has become a destination of choice as its status as a technology hub has been consolidated over the last 10 years, attracting talent, foreign investment and giving rise to a multitude of start-ups. Additionally, English is widely spoken as a second language.
Local startup names to know include multilingual translation service Unbabel, crypto wallet Utrust and Virtuleap, which uses virtual reality to improve brain health.
Big Tech also has a presence here: Amazon, Google, IBM, Fujitsu and Cisco Systems are among the biggest companies with offices in Lisbon.
When it comes to daily life, Lisbon is more expensive than anywhere else in the country, being the capital and the center of the tech scene.
It’s also more expensive than a few years ago, but that’s relative. For example, consumer prices, including rent, are 41 percent lower than in London, according to Number.
Taxation is also favorable, as the country seeks to attract talent. Non-habitual tax residents benefit from the non-habitual residence (NHR) tax regime, introduced in 2009, which provides tax relief to individuals during their first ten years of residence in the country.
Indeed, those moving to Portugal to work pay a flat rate of 20 percent, compared to the highest income tax bracket currently paid by locals, 48 percent income tax.
Bulgaria: a rising star in the Balkans
A Balkan country, Bulgaria joined the EU in 2007. Although it has not yet adopted the euro (the currency here is the Bulgarian lev), it is an affordable place to live with good weather: the country as a whole enjoys warm summers and mild winters.
When it comes to where to put your hat, the capital Sofia is where foreign workers flock to.
Located in the west of the country, Sofia is close to Serbia and Romania, as well as central and southern Europe. Since the country joined the EU, its economy has been booming.
“Bulgaria has undergone a significant transformation over the past three decades, moving from a planned, highly centralized economy to an open, upper-middle-income market economy,” according to the report. The World Bank.
Nowadays, Sofia benefits from quality and affordable public transport, including regular metro service, trams and buses, which connect most parts of the city, and the technology scene is booming.
In 2021, the city was ranked 20th out of 80 localities in the ranking FDi’s technology cities of the future report, ensuring its growing importance internationally.
The technology sector is one of the most dynamic in Sofia, and Sofia Invest Report 2020 shows that the city is a major ICT hub, with more than 50,000 people employed.
So, if you want to live and work in Bulgaria, how much will it cost you? Number indicates that for comparison, consumer prices, including rent, in Sofia are 50 percent lower than those in Paris.
Disadvantages ? Although Bulgaria can be an attractive and affordable choice for foreign workers, language can be a barrier for some. Only about a quarter of the country’s population speaks English, but this figure is higher in tourist areas and in Sofia.
Spain: an old favorite with variety
A long-standing and popular relocation destination for foreign workers, the tourist regions of the Spanish coast are where many Europeans often flock to work.
But there are many other places in this vast country that offer enormous opportunities for those looking to settle down.
Madrid, Barcelona and Valencia are the country’s three largest cities and well-established centers of finance, technology and industry, as well as popular locations for those looking to set up roots.
The “smart city” of Santander in northern Spain is a place that foreign knowledge workers in particular might watch with interest.
Located in the Cantabria region on the northern coast of Spain, it is not far from the larger cultural and gastronomic centers of Bilbao and San Sebastian. With a population of around 180,000, Santander is a small city, but one that has been at the forefront of the smart city revolution.
There are 12,000 sensors buried under streets, on lampposts and in city buses, which measure air pollution, count free parking spaces, monitor trash bins and dim the lights.
Since 2010, the city has also actively participated in research projects in Europe and Asia, with more than 350 institutions and companies nationally and internationally.
All of this is attractive to tech companies, and top companies in the area include professional services firms Deloitte and Accenture as well as Microsoft. Local heroes include Eolas Prints, a manufacturer of filament for 3D printers.
As compact as it is, Santander is a city that offers an affordable lifestyle for workers. Prices here, including rent, are around 36 percent lower than in Berlin, for example.